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Business Model Innovation © Copyright 2006 By InnovationLabs by Model Innovation Langdon Business Morris © Copyright 2006 By InnovationLabs Business Model Innovation “point of view is worth 80 IQ points” Alan Kay © Copyright 2006 By InnovationLabs Business Model Innovation © Copyright 2006 By InnovationLabs Business Model Innovation © Copyright 2006 By InnovationLabs Business Model Innovation Chip capacity (Moore’s Law) ... Use of Fax Machines ... Use of Cell Phones ... Use of Internet … Information Excess ... Growth of Human Population ... Consumption of Resources … Increasing Pollution … Exponential Change! © Copyright 2006 By InnovationLabs Business Model Innovation 2004-11-08 New Scientific Consensus: Arctic Is Warming Rapidly REYKJAVIK -- The Arctic is warming much more rapidly than previously known, at nearly twice the rate as the rest of the globe, and increasing greenhouse gases from human activities are projected to make it warmer still, according to an unprecedented fouryear scientific study of the region conducted by an international team of 300 scientists. © Copyright 2006 By InnovationLabs Business Model Innovation In 2000, the world had 6.1 billion human inhabitants. This number could rise to more than 9 billion in the next 50 years. For the last 50 years, world population multiplied more rapidly than ever before, and more rapidly than it will ever grow in the future. Human Population: Fundamentals of Growth Population Growth and Distribution Anthropologists believe the human species dates back at least 3 million years. For most of our history, these distant ancestors lived a precarious existence as hunters and gatherers. This way of life kept their total numbers small, probably less than 10 million. http://www.prb.org/Content/NavigationMenu/PRB/Educators/Human_Population/Population_Growth/Population_Growth.htm © Copyright 2006 By InnovationLabs Business Model Innovation http://www.de.tomshardware.com/business/20030219/images/17.jpg © Copyright 2006 By InnovationLabs Business Model Innovation http://qsi.cc/blog/archives/cat_finance_economics.html © Copyright 2006 By InnovationLabs Business Model Innovation Is not the same as how you manage ... here How you manage © Copyright 2006 By InnovationLabs here Business Model Innovation You are here* *Manage accordingly © Copyright 2006 By InnovationLabs Business Model Innovation complexity complexity complexity complexity complexity complexity © Copyright 2006 By InnovationLabs Business Model Innovation Creative Destruction Sears 1886 - 2005 Oldsmobile 1897 - 2004 ATT 1885 - 2005 Bethlehem Steel 1857 - 2003 Compaq 1982 - 2002 DEC 1957 - 1998 Netscape 1994 - 1998 Webvan 1998 - 2001 Volvo 1927 - 1999 Chrysler 1925 - 1998 © Copyright 2006 By InnovationLabs etc., etc., etc. Business Model Innovation Auto Industry © Copyright 2006 By InnovationLabs Business Model Innovation Sept 8, 2006 © Copyright 2006 By InnovationLabs Business Model Innovation Auto Industry Market Share: US Market 1970 © Copyright 2006 By InnovationLabs 1980 1990 2000 Business Model Innovation © Copyright 2006 By InnovationLabs Business Model Innovation ? hard to do © Copyright 2006 By InnovationLabs Business Model Innovation ? hard to do The Prelude: Delphi in Bankruptcy January 1, 2006: 27,500 Unionized Workers January 1, 2007: 7,400 Unionized Workers © Copyright 2006 By InnovationLabs The Real Show: GM in Bankruptcy? January 1, 1990: 358,000 Unionized Workers January 1, 2006: 137,000 Unionized Workers January 1, 2010: ??? Unionized Workers Business Model Innovation The Past Traditional Products and Services Traditional Distribution customer supplier Feed © Copyright 2006 By InnovationLabs back Business Model Innovation The knowledge channel Traditional Products and Services Traditional Distribution customer supplier Feed back The Knowledge Channel Exchange of information and knowledge, bi-directional, in real time ... Before the sale, during the sale, after the sale ... Face to face, at a distance, across the internet ... © Copyright 2006 By InnovationLabs Business Model Innovation ? What does GM need? © Copyright 2006 By InnovationLabs A new Business Model Business Model Innovation © Copyright 2006 By InnovationLabs Business Model Innovation what is a business model? © Copyright 2006 By InnovationLabs Business Model Innovation brand products & services ways of communicating supply chain organization + business model a business is a system technology applied that occupies a niche in an ecosystem © Copyright 2006 By InnovationLabs Business Model Innovation a business model … creates what customers experience. Those experiences shape the game of business. A business model describes and how a company is organized and operates to deliver those experiences. Business Model Warfare is intentionally creating customer experiences that result in competitive advantage. © Copyright 2006 By InnovationLabs Business Model Innovation Stagnant Business Models © Copyright 2006 By InnovationLabs Innovative Business Models Business Model Innovation * Motorola Digital DNA This is a mobile telephone. This car company is a telephone company. © Copyright 2006 By InnovationLabs Business Model Innovation This is a mobile telephone. This clothing company is a telephone company. © Copyright 2006 By InnovationLabs Business Model Innovation Now available: E-mail Satellite TV Internet This is a portable telephone This airline manufacturer is a telecommunications provider. © Copyright 2006 By InnovationLabs Business Model Innovation A Parable of Business Model Warfare The difference between success and failure in Venture Capital investing. 10 companies failed. They stayed with their original business model. © Copyright 2006 By InnovationLabs 10 companies succeeded. They changed their business model. Business Model Innovation modeling the market © Copyright 2006 By InnovationLabs Business Model Innovation Transportation Market High Wealth Lexus Mercedes BMW GM Ford Toyota Honda Commodity / Mass Differentiated/Customized Rolls Royce Ferrari Used Cars Public Transportation Low Wealth © Copyright 2006 By InnovationLabs Business Model Innovation GM Business Model: 1925 - 1980 High $$ Cadillac Oldsmobile Buick Pontiac Chevrolet Commodity / Mass Differentiated/Customized GM Used Cars Public Transportation Low $$ © Copyright 2006 By InnovationLabs Business Model Innovation GM Business Model: 2006 Hummer Cadillac GM Finance Onstar Saab Buick Pontiac Chevrolet Commodity / Mass Differentiated/Customized High Wealth Saturn Used Cars Public Transportation Low Wealth © Copyright 2006 By InnovationLabs Business Model Innovation GM Profit: 1975 Making & Financing Selling Cars Cars © Copyright 2006 By InnovationLabs Business Model Innovation GM Profit: 2006 $500 million © Copyright 2006 By InnovationLabs Making & Selling Cars Financing Cars $2,500 million Business Model Innovation Q ui ck Ti m e ™ an d a T IF F ( Un co m p re ss ed ) d ec om pr es so r a re ne ed ed t o s ee th i s pi c tu r e. Profit: 2020? 0 million Making & Financing Selling Cars Cars Telecommunications in Cars $25,000 million $2,500 million © Copyright 2006 By InnovationLabs Business Model Innovation IBM Business Model © Copyright 2006 By InnovationLabs Hardware Software Finance Services 2004 Hardware Software Finance Services 1990 Business Model Innovation IBM See also: “Industry contraction in recent years has forced IT companies to choose between being high value innovation players or high volume distributors of other people’s intellectual capital. Companies that are caught in middle run the risk of being hammered from both below and above. IBM PC Division ATT Compaq Sears Levi Strauss K-Mart Oldsmobile Mercury Buick “IBM is an innovation company.” IBM Annual Report 2004 © Copyright 2006 By InnovationLabs Business Model Innovation Modeling the Retail Industry Quality Tiffany Gucci Louis Vuitton Nordstrom Macy’s ? Target WalMart Dollar Store Sears Thrift Store Garage Sale eBay Price © Copyright 2006 By InnovationLabs Business Model Innovation time Incremental © Copyright 2006 By InnovationLabs Breakthrough Product & Technology Business Model New Venture Business Model Innovation Langdon Morris InnovationLabs Lmorris@innovationlabs.com www.innovationlabs.com © Copyright 2006 By InnovationLabs Business Model Innovation In Summary: It’s Confusing to Deal with Change … http://www.funtown.com/sig ns2/pic.jpg http://www.davesdaily.com/ http://www.wheelsafe.co.za/4b5c8e10.jpg © Copyright 2006 By InnovationLabs Business Model Innovation http://www.quadranet.org/tokezone/itchy/pix_oz/images/Road%20signs%20on%20the%20Nullarbor%20highway.jpg © Copyright 2006 By InnovationLabs Business Model Innovation New Business Models Ahead http://www.quadranet.org/tokezone/itchy/pix_oz/images/Road%20signs%20on%20the%20Nullarbor%20highway.jpg © Copyright 2006 By InnovationLabs Business Model Innovation Changes Ahead! http://www.quadranet.org/tokezone/itchy/pix_oz/images/Road%20signs%20on%20the%20Nullarbor%20highway.jpg © Copyright 2006 By InnovationLabs Business Model Innovation Thank You! http://www.quadranet.org/tokezone/itchy/pix_oz/images/Road%20signs%20on%20the%20Nullarbor%20highway.jpg © Copyright 2006 By InnovationLabs Business Model Innovation
